During the Year Ended 30 June 20X7 a Subsidiary Entity

question 19

Multiple Choice

During the year ended 30 June 20X7 a subsidiary entity sold inventory to a parent entity for $30 000. The inventory had previously cost the subsidiary entity $24 000. By 30 June 20X7 the parent entity had sold 75% of the inventory to a party outside the group. The company tax rate is 30%. The adjustment entry in the consolidation worksheet at 30 June 20X8 is:

• A) \(\begin{array} { l l c r }
• \text { Sales revenue } & \mathrm { Dr } & 30,000 & \\
• \text { Cost of sales } & \mathrm { Cr } & 28,500 \\
• \text { Inventory } & \mathrm { Cr } & 1500 \\
• \text { Deferred tax asset } & \mathrm { Dr } & 450 & \\
• \text { Income tax expense } & \mathrm { Cr } & 450
• \end{array}\)
• B) \(\begin{array} { l l r l }
• \text { Retained earnings } & \mathrm { Dr } & 1400 & \\
• \text { Income tax expense } & \mathrm { Dr } & 600 & \\
• \text { Cost of sales } & \mathrm { Cr } & & 2000
• \end{array}\)
• C) \(\begin{array} { l l r l }
• \text { Retained earnings } & \mathrm { Dr } & 1050 & \\
• \text { Income tax expense } & \mathrm { Dr } & 450 & \\
• \quad \text { Cost of sales } & \mathrm { Cr } & & 1500
• \end{array}\)
• D) \(\begin{array} { l l c r }
• \text { Retained earnings } & \mathrm { Dr } & 1500 & \\
• \text { Inventory } & \mathrm { Cr } & 1500 \\
• \text { Deferred tax asset } & \mathrm { Dr } & 450 & \\
• \text { Retained earnings } & \mathrm { Cr } & 450
• \end{array}\)

---

Definitions:

Religiosity

The extent of interest, commitment, or participation in religious values, beliefs, and activities.

Death Anxiety

The fear of death and dying.

Finality Of Death

The irreversible and permanent cessation of life, marking the end of an individual's existence in the physical world.

Death Fears

Anxiety or dread related to the process of dying or the state of being dead.